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A GUIDE 



PROFITABLE SPECULATION 



WALL STREET. 









RUMBLE & CO., 



No. 53 .BRO-AJDWAY, N. Y. 



Bntered according to Act of Congress In the year 1874, by 

Rumble & Co., in the office of the Librarian of 

Congress, at Washington. 



¥^e 0pe6ilktor^ Gjnide. 



(?K«pEW YORK is the great commercial empo- 
|||g*i rium of the Western World, and is grow- 
ing in influence and importance yearly. The term 

WALL STREET 

is used to express the central point of its financial 
greatness. In this street and vicinity are aggre- 
gated the great money institutions, representing 
the wealth of a continent, and the business enter- 
prise which vivifies the nation. From hence our 
commerce is impelled, and hence is supplied the 
means which has united this whole country in a 
vast net-work of Railways, unequaled on the face 

of the earth. 

SPECULATORS. 

The most prominent of our business men have 
been and are speculators in the stocks of these 
Railways ; many of whom began life on the low- 
est round of fortune's ladder, and accumulated 
their millions. We could fill pages with their 
names and successes, but that is not necessary — 
the statement of the fact suffices. 

OUR OBJECT 
in this little volume is to point out to you the 
way wherein you, with your means, be they small 



3 

or greater, can successfully compete for a share 
of the vast sums annually amassed, and to 

GUIDE YOU AWAY 
from the slippery places whereon many have fall- 
en. There is no business ever yet followed by 
man without its dangers, and the record of our 
mercantile agencies show that more men fail in 
merchandizing than in the speculations of Wall 
street ; and we mean to show you ours is the surer 

ROAD TO FORTUNE, 
as our latest experience enables us to light up to 
you, and we will now proceed to make the same 
plain. 

BULLS AND BEARS. 

A bull is one who looks for an advance, and 
buys stocks to hold for a profit ; he is, therefore, 
"long" of the market. 

A bear is one who looks for a decline, and sells 
stocks that he does not own, with the expectation 
of buying at a lower price, and is therefore " short " 
of the market. While thus waiting for the mar- 
ket to fall he fills his contract by borrowing stock 
of some bull, and leaving as security an amount in 
cash equal to the market value of the same. 

DEALIXGS. 
All the business of dealing in stocks is trans- 
acted between the hours of 10 and 3 o'clock, on 
the floor of the New York Stock Exchange (a 



handsome commodious edifice, with entrance from 
Wall, Broad, and New streets,) by the members 
thereof, who are governed by their own laws and 
regulations; and any member failing in a strict 
observance of the same is immediately suspended, 
or expelled from the board. 

The highest principle of commercial honor regu- 
lates all their dealings ; and it is safe to say that 
no other class of business men place their word 
or promises in greater esteem. Dealings are con- 
tinuous, and thus an order can be executed at the 
moment for any amount. A broker having an 
order goes at once to that part of the 

GREAT HALL 

where are collected those having orders to buy 
and sell that particular stock, and the offers and 
bids being constant, he is enabled to accept the 
one or the other ; or, if his order does not come 
within the prices ruling, he either waits or adds 
his voice to the prevailing din (making what they 
call chin music), thereby trying to influence the 
market up or down, which can amount to very 
little indeed, unless the order is for thousands. 

The fluctuations are occasioned by large orders 
from wealthy operators on pools. When they de- 
sire a stock to rise they send in one or many bro- 
kers, with orders to take all the stock that appears 
up to a certain price, and the excitement is some- 
times intense as point after point is reached. 



5 

OPPOSITION. 

Now, it frequently happens that some other 
wealthy combination, or clique, desire that par- 
ticular stock to go clown, and they send in orders 
to sell ; in which case the fluctuations are wide and 
frequent, and these, reader, you want to take ad- 
vantage of for your own profit, and which we 
shall now proceed to explain to you can be done 
with safety to yourself through the medium of 

STOCK PRIVILEGES. 
which consist of "puts," kk calls'" and "spreads.' 1 

By the aid of these a person with a small capital 
can compete with the millionaire, and controls' 
as great a value in stocks as was possible under 
the old system of margins for the wealthy bank- 
er. We will also demonstrate that the makers of 
these privileges does not necessarily lose money 
because you secure a handsome profit. 

A CALL 

is a contract to sell you a given number of shares 
of a stock at a certain fixed price, within a given 
time, and reads like this : 

For value received, the learer may call on us for 
one hundred shares of the capital stock of the New 
Yorl: Central Railway Company, at ninety-nine per 
cent, of its par value, at any time within thirty clays 
from date. The learer is entitled to all dividends 
declared during the time. 

Stocks, Bonds & Co. 

Expires at l.Ji5 P. 31. 



6 

If you think the market will advance you buy 
this contract for such a number of shares as you 
see fit. Should you feel that the market will de- 
cline, you buy 

A PUT. 

For value received, the bearer may deliver to us one 
hundred shares of the capital stock of the New York 
Central Railway Company, at ninety-nine per cent, 
of its par value, qt any time within thirty days from 
date. The undersigned is entitled to all dividends 
declared during the time. 

Stocks, Bonds & Co. 

Expires at 1.1^5 P. M. 

Now, it frequently so happens, that you cannot 
make up your mind which way the market will 
move. A great contest may be raging in some 
specialty which, ending as it may, will be sure to 
cause a wide variation in the price. We. meet 
that case, and buy for you 

A SPREAD, 
which is a "put" and a u call" combined, but 
which, being embodied in one document, is made 
nearer the market than a separate Call and Put 
would be. With this double privilege in your 
possession, let the market go up or go down, and 
you reap your profit by exercising your option; 
these are made usually two per cent, from the 
market each way, and they rarely fail to pay a 
profit one way or the other. Let us now explain 
how responsible members of the Exchange can 



+ 7 

afford to sell these privileges, and not only suffer 
no loss, but make good profits. 

EXAMPLE. 
(showing a profit to ALL PARTIES. I 
Suppose you order us to buy for you a call on 
500 New York Central, the market price of which 
is par; we pay one per cent, at 102, and the maker 
of the document immediately buys 500 stock at 
par, and we will suppose the price advances 
within the 30 days to 110. and you order us to 
close the contract and remit your profits, the ac- 
count stands thus : 

Member of Xew York Stock Exchange — 

Bo t 500 Central at par $50,000 

Delivered same to us at 102 $51,000 

Monev we paid him for Call. . . . 500 

$51,500 

Profit to member $1,500 

And your account stands : 

Paid money for Call $500 

" for stock called at 102 51,000 

$51,500 

Sold 500 stock on the market, at 110 55,000 

Profit to our customer (less our cornin ns) $3,500 

Our commissions are £ ($12.50 per hundred) on 
all stocks bought or sold. 

Thus all parties in interest make money. If 
you thought the market was going down you 



8 

would order us to buy instead a Put ; for this we 
should not go to this same member, who is a bull, 
but rather to some other member, who is a bear, 
and pay him the one per cent, for the privilege of 
delivering him the stock at say 98; against 
which contract the bear immediately sells 500 
•stock at par. And we will suppose that the mar- 
ket price declines to 90. and you order us to close 
the contract and remit you profit, the resulting 
profits to us all are the same exactly. But you 
ask, how is it if the market does not go up when 
I buy a Call, or down when I buy a Put, but goes 
the contrary way I We answer, your loss is limit- 
ed to the one per cent, paid for these contracts, 
and the members profit and loss account is his 
own business. In our market there are always 
bulls and bears, and we buy their contracts ; it is 
their business to judge of the market, and protect 
themselves as they think best. To provide, then, 
for the chance of being mistaken in the direction 
of the market, we buy for you a Spread. 

EXAMPLE, 

(SHOWING OPERATION OF A SPREAD) 

on 500 Central, and pay one per cent, each at 102 
and 98. Now, then, let the price rise to 110 or 
fall to 90, and our profits come in. 

TRADING ON THE MARKET. 

Now, it often happens, that while a movement in 
price of this kind is transpiring there are many 



fluctuations, and it is very desirable to trade on 
your Spread ; i. e. , buy on the sudden variations, 
and sell out quick at one or two per cent, profit, 
as the market gets back for the moment. In 
periods of great activity this is frequently done 
several times in a day. You should always bear 
in mind that trading should not be commenced 
until a profit is shown, and then, if the market 
does not work to favor you, something is already 
secured. 

COST OF PRIVILEGES 

are one dollar per share, and our commission of 
6^ cents, for 30 days time. They are issued at a 
distance from the market of 1 to 3 per cent., de- 
pending on the speculative character of the stock 
and the state of the market at the moment. When 
the market is very active, and the demand for 
privileges great, we have to go farther away; 
and then again, at a dull period, we can buy very 
close indeed. On the active favorites, such as 
Western Union Telegraph, Pacific Mail, Lake 
Shore, Union Pacific, New York Central, Erie, Rock 
Island, &c, for Calls, %\ @ 3 above; for Puts, 2 
@ 2^ below ; for Spreads, 1 J @ 2^ each way. 

TABLE OF COSTS. 

A Put or Call for 30 days, (including com- 
mission) for 10 shares $10. 63 

Do. "25 " 26.56 

Do. " 50 " 53.12 

Do. -100 " 106.25 



10 

A Spread (or double privilege) costs just twice 
the above rates, and your especial attention is de- 
sired to these, as in an active season they cannot 
fail, no matter which way the stock jumps. 

SOME EXAMPLES OF THE PROFITS OF PRIVILEGES. 

From our business of the past 60 days, we illus- 
trate the practical working of Privileges by the 
following examples of profits paid. You will ob- 
serve our customers did not have to wait 30 days. 
The Call made its profit in a week ; the Put in two 
weeks ; and the Spread, working both ways, paid 
well. From a large number of Privileges for 
small quantities of stocks settled at this time, we 
could select some which paid a greater per cent, 
of profits, but these suffice to show you the prac- 
tice. 

SHOWING PROFIT ON CALL. 

22d June. Bo't Call for Mr. B. on 500 L. S. 

@ 70. paid $500 00 

Our commissions 31 25 

$531 25 

30th June. Sold on the market 500 L. S. 

@ 77 $3S,500 00 

Called 500 L. S. @ 70 35,000 00 

$3 500 00 

Our commissions, >s 62 50 

3,437 50 

Net profits paid our customer $2,906 25 

SHOWING PROFIT ON PUT. 

30th June. Bo't Put on 500 W. U. Tel. @ 

75 $500 00 

Our commissions 31 25 

531 25 



11 



11th July. Bo't on the market 500 W. U. 

Tel. @ 70 $35,000 00 

Put the same @ 75 37,500 00 



|2,500 00 

Our commission, % 62 oO 

2 : 437 50 

Net profit paid our customer 31.906 25 



SHOTTING PROFIT OX SPREAD. 

10th June. Bo't Spread on 500 R 1. q? 1 ^ 

paid .. $1,000 CO 



Oir commissions 

20th June. Bo't cOO stock on mar- 
ket @ 93 $16,500 00 

30th June. SoH 500 stock on mar- 
ket © 101 50,500 00 



.$1,062 50 



$4,000 00 
Our comm's #, 125 00 
lld'sint @7p.c 99 44 

224 44 

$3,775 56 

30th June. Sold 500 stock on mar- 
ket @ 102 $51,000 00 

10th Julv. Bo't 500 stock on mar- 
ket @96H 48,250 00 



$2,750 CO 

Our commissions 125 00 

2 625 00 

6,400 56 

Net profit paid our customer $5,338 06 

This also illustrates what it is to be both a bull 
and a dear; when we bought the stock against the 
put we assumed the bull side of the market, and 
had it gone down we should have put the same at 
95 and ended the contract, but the rise enabled us 
to sell at a good figure, and as the price still ad- 
vanced we sold " short ;" now. if the price ha'd 



12 

continued to advance (which it was liable to do) 
we should have "called" the stock and closed 
the contract that way, but the market favored us 
and the stock was bought 2 per cent, cheaper than 
the privilege. 



Table shotting the range of fluctuations for the 

month of September, 1873. 
(This was the month of panic, and of course is exceptional.) 

Fluctuation on Fluctuation on 
100 Shares. 10 Shares. 

N.Y. Central &H... 1©5# $1,612 50 $16125 

Lake Shore & M. S. . 93 2,000 00 200 00 

Rock Island 109 2,200 00 220 00 

87 

Harlem *fX 4,025 00 402 50 

Mil. & St. Paul g 2,100 00 210 00 

Northwestern &% 2,475 247 50 

Ohio & Miss ™% 1,275 00 127 50 

zoy 2 

Pacific Mail JJ* 1,325 00 132 50 

Union Pacific «H 1,150 00 115 00 

16 

West. Union Tel ... . 92tf 3,825 00 382 50 

The differences represent the profits that accrued 
on puts, and the greater part of which can be 
made by fortunate holders, and results from an 
investment of $106.25 or $10.63. 



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15 



Table showing the range of fluctuations for one 
month succeeding June 22cl, 18? '4. 



Pacific Mail «X "££■ 

Western Union Tel. . ™ highest, 

Lake Shore f s A highest, 

67% lowest, 

Union Pacific 29 highest, 

23 lowest, 

Central & Hudson.. 100% highest, 

96% lowest, 

Rock Island 102% highest, 

9214 lowest, 

Tol., Wab. & West. . 39% highest, 

29 lowest, 

Mil. & St. Paul 41i/ 2 highest, 

31% lowest, 

Ohio & Miss 26% highest, 

21% lowest, 

Northwestern 44% highest, 

35 lowest, 



Difference on 
100 Shares. 

$637 50 


700 00 


975 00 


600 00 


475 00 


1,025 00 


1,087 50 


975 00 


487 50 


987 50 



INSTRUCTIONS FOR ORDERS. 

All orders must be accompanied with the money, 
which may be, a postal money order, drafts on this 
city, or, if for a small amount, the greenbacks 
may be entrusted to a registered letter; large 
amounts it is better to send per express. 

The Privileges will be mailed to you the same 
day as ordered, or for the benefit of those living 
at a distance, we will hold them for their account, 



16 

and operate them as we may be directed ; or, we 
will act for our clients in closing them at such 
favorable time as the market may present, using 
our best judgment for their interest, keeping you 
duly advised by mail or telegraph of all details. 

The Privilege can be settled by any one, at any 
hour by presenting the same at our office. We pay 
all profits that have accrued, and the contract is 
given up to us, and canceled. 

Those who desire us to act for them will do 
well to give us an idea of the profits expected, and 
as particular instructions as possible, in order that 
we may meet their views and render to them the 
most complete satisfaction. We labor for our 
commissions, and the best interests of our patrons. 

Be particular to write plainly your name, town. 
or Post Office, County and State ; and for any de- 
sired information or explanation, write to us. 
Any one whose eye may read these pages, desiring 
light upon any points of Wall street speculation, 
write us, and we shall take pleasure in posting 
you, and aiding you to turn your few dollars into 
many ; and if you already have many, we con- 
gratulate you, and say you can add to them unliin- 
itedly, for our market is large enough for all. 

We issue from time to time a circular, setting 
forth the distance from the market at which privi- 
leges are selling, and noticing any prominent 
items of speculative interest which may transpire. 

Awaiting your orders, we remain your obedient 
servants, 

RUMBLE & CO., 

P. 0. Box, 4905, NEW YORK. 

No, 5%Z Broadwayi 












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